No, 60 days of the ‘average’ Kenyan wage won’t buy you a new iPhone XS

Claim

An average Kenyan will have to work almost 60 days to afford Apple's premium iPhone XS.

Source: Capital FM (January 2019)

misleading

Verdict

Explainer: “Average wage” excludes informal sector workers.

  • A comparison of wages in 42 countries claimed it would take 60 days of work at Kenya’s "average wage" to afford a high-end smartphone.
  • The figure comes from the Kenya National Bureau of Statistics. But it applies only to those employed in the formal sector – just 17% of working people.
  • The majority (83%) of employed people work in the informal sector, earning lower wages.


If the average Kenyan wants to buy a snazzy new iPhone XS smartphone, they’ll have to stop paying all other living expenses for 60 days, a story by the country’s popular Capital FM radio station claims.

It says the country’s “average net salary” is KSh44,135, attributing the figure to the Kenya National Bureau of Statistics. The iPhone XS costs KSh125,000 (US$1,240) in Kenya, the January 2019 story adds.

“This means that an average Kenyan will have to work almost 60 days to afford the new Apple device.”

Would it take this number of working days for “the average” employed person in Kenya to afford an iPhone XS? We checked.

Figures ‘from Kenya’s statistics agency’

The number – exactly 59.5 working days – comes from a September 2018  analysis by Picodi, a Polish retail company, of how many days citizens in 42 selected countries would have to work to afford the phone.

Africa Check asked Picodi how they calculated their numbers.

An Apple iPhone XS (left) and iPhone Xs Max during a launch event in September 2018, in California, USA. Photo: AFP
An Apple iPhone XS (left) and iPhone Xs Max during a launch event in September 2018, in California, USA. Photo: AFP

Katarzyna Kobyłka, who works in marketing and analysis at Picodi, told us the figures came from the Kenya statistics bureau’s 2018 Economic Survey.

The most recent average annual wage available (2017) amounts to KSh684,097 (gross),” Kobylka said.

“We used a tax calculator for the year 2017 and divided the result by 12 (number of months) in order to obtain the final amount of KSh44,135 (or about US$430 in 2017).”

Kobylka sent us a screenshot that showed Picodi used the Calculator.co.ke tax calculator. Using the Pay as You Earn (PAYE) Tax Calculator available on the website of the tax-collecting Kenya Revenue Authority (KRA), the final monthly amount is KSh44,546. (Note: The tax agency says the calculator estimate is only a guideline. For exact figures the relevant laws should be used.)  

How many working days did Kenya have in 2017?

Kenya had 250 working days in 2017, or 20.8 working days a month, according to timeanddate.com’s business day calculator. If we subtract four extra public holidays related to the 2017 elections, its comes to 246 working days.

This brings the “average” amount earned each day to about KSh2,173. It would therefore take 57.5 days to earn the KSh125,000 quoted price of the iPhone XS – two days short of the 59.5 days claimed by Picodi.

But net pay is never uniform

Net pay is never uniform, according to Victor Omwanda, a partner at Nairobi-based certified public accountants firm AbdulHamid & Victor. This is because contributions and deductions vary for each taxpayer.

For example, he said, “one qualifies for both mortgage relief and insurance relief separately”.

Only 25% of formally employed people earn the average wage

KSh684,097 is the average yearly wage earned in Kenya’s private and public sector, according to the 2018 survey. Does it represent the country’s average annual salary?

“No, it does not. It’s the wages of formal sector workers,” Kwame Owino, head of the Institute of Economic Affairs Kenya, told Africa Check.

Only 17% of people with jobs were employed in the country’s formal sector in 2017. The other 83% worked in the informal sector. In 2017, a total of 16.9 million people had jobs – 14.1 million of them in the informal sector.

This means the wages of the small number of formally employed workers can’t be taken to represent the average wage of all Kenyan workers, Owino told Africa Check.

According to the statistics bureau’s 2018 Statistical Abstract, nearly three-quarters (74%) of all formal sector employees earn less than this average gross annual wage (or KSh57,008 monthly).

Conclusion: ‘Average wage’ needed to buy iPhone in 60 days applies to just one in five Kenyan workers

A Polish retailer pulled up official wage data from 42 countries to find out how many days people earning the  “average wage” would have to work to afford Apple’s latest high-end smartphone.

It would take the “average Kenyan” 60 working days to earn enough to buy the iPhone XS – without paying any other bills.

But while the official data does show the average annual Kenyan salary is KSh684,097, this applies to the formal sector. Three in every four Kenyans earn less than this.

And Kenya’s formal sector employs only 17% of workers, with the majority (83%) employed in the informal sector. A salary that only applies to 17% of Kenyan workers can’t be taken to represent all workers, an expert said.

We thus rate this claim as misleading.


Further reading:

 

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